Global Governments Pile Up Debt as Advanced-Economy Borrowing Hits 108% of GDP
Updated
Updated · Financial Times · Aug 3
Global Governments Pile Up Debt as Advanced-Economy Borrowing Hits 108% of GDP
1 articles · Updated · Financial Times · Aug 3
Summary
Nearly 900 support measures across 170 countries were rolled out by mid-June to cushion this year’s energy shock, but many were broad, open-ended subsidies that the IMF had warned against.
That response reflects a wider shift toward borrowing over fiscal restraint as governments fund defence, infrastructure, tax cuts and social spending rather than reversing deficits once crises pass.
IMF estimates show gross government debt in advanced economies rising to 108% of GDP this year from 94% in 2010, while emerging-economy debt climbs to 77% from 37%.
BIS and IMF evidence suggests the old pattern of higher debt triggering fiscal repair has broken down, with countries now also loosening budgets in good times.
Geopolitical conflict, climate costs, ageing populations and AI-related disruption are set to keep pressure on public finances high, while weak global co-operation leaves bond markets as only a limited check.